"The only way to smash this racket is to conscript capital and industry and labor before the nations manhood can be conscripted." This is a great quote. Never gonna happen. But what a change that would make. If we instituted a "draft" of the financial and industrial systems, e.g. made them pay for war the way drafted soldiers pay-- without profit-- without choice-- we wouldn't go to war. The powerful and wealthy would never allow their profits to disappear into that kind of a void.
"Conscript capital and industry and labor before the nations manhood can be conscripted"
Are you kidding? It's called taxation!
People are taxed massively more now than at any time in history and a lot of it goes towards the military. I'm not saying that's good or bad - just that it is.
The General has a right to his opinion, but he cannot seem to grasp action and consequence.
The world is not some simple place wherein you can have easy answers to such questions.
Imagine for a moment if America did not control the high seas, the Panama canal, de-facto the Suez, the Gulf, and patrol the South China sea - and make them open and free for everyone to navigate - even competitors like China, Iran and Russia?
All of those areas - including the routes around S. America and Africa would be controlled by totalitarian/thuggish entities or irregular forces and it'd be too expensive or unsafe to travel.
He's not talking about taxation. He's saying, "Before you institute a draft and force healthy young men into poverty, suffering, mental disorders and death, force the people who profit from such action into exactly the same situation (e.g. max salary of whatever the soldier's max salary is, production at bare costs, etc)." He's making the point that war would suddenly cease to be an option, because only the poor and powerless can be conscripted. If you started conscripting everyone in the same way, the rich and powerful would stop any such war from occurring in order to avoid such pains.
Though income tax rates after the war were quite high - it was for a very small group, and actual receipts were not as high.
'The 1%' do not generate a lot of income, they generate capital gains, which is why a 90% 'income tax' rate wouldn't have the effect you might think.
Moreover, in a climate wherein there actually is a 90% income tax rate, every wealthy person that can afford an accountant (i.e. all of them) would find ways around this. They'll simply take almost no income, and use other vehicles instead, i.e. sale of shares, royalties etc..
By that reasoning, why tax the rich at all? They'll always find a way around it.
In fact, the rich are not all powerful and don't get carte blanche when it comes to hiding their money.
Do you remember all of those secret Swiss bank accounts which were widely used to hide money? Well, in recent decades, the US has managed to force the legendarily secret Swiss banking system to become much more transparent, precisely in order to go after tax evaders. Tax evasion has also become a really serious issue in Europe. Governments are in fact going after the rich to get their due.
That doesn't mean there aren't loopholes, or that the rich can't manage to hide some of their money (at least temporarily, while the law catches up with them). But that doesn't mean they can hide it all or that there'll be no consequences for at least some of them. It certainly does not mean that we shouldn't try to tax them more.
I'm just saying that during the era of 90% 'income tax' for high earners, they would simply declare their income as capital gains. It's just what they did. And what people do.
No, you do not get to simply recategorize earned income as unearned. And also at the time of these high rates there was no seperate capital gains tax. The income tax rate applied. What would not have applied is FICA tax, i.e. Social Security and Medicare, which is only assessed on earned income ( i.e. wages from a job).
"There's no reason why capital gains couldn't be taxed at the same rates as income."
Sure there is -> risk.
It's why everywhere in the world cap gains are taxed lower than income.
Cap gains + income tax at 90% and economy would collapse instantly as risk premium goes up, most equities and probably most bonds would drop quite a lot and people moved into real-estate, cash, commodities, gold. etc..
>>People are taxed massively more now than at any time in history...
Please explain that comment in the context of 94% top income tax rates in the U.S.
And also explain how it is the U.S. recently had a president who said tax cuts were necessary somehow because running a surplus and paying off the debt is bad, and once at war and running large deficits again would not consider a war time tax.
Taxation implies profit. There used to be a time when war profiteering got you sent to jail.
